Payroll Abbreviations

While performing payroll tasks, your payroll staff uses abbreviations, which are convenient for pay stubs and other payroll-related documents. Some of these abbreviations are used universally by other employers, while others are created and used for inter-company purposes. Abbreviations are applied more frequently in some areas of payroll than in others.

Abbreviations that may apply during payroll processing include PAR for payroll action request, which is a document that another internal department uses to request that payroll execute a specific task. ACH, or automated clearing house, enables the transfer of funds from your company’s bank account to your employees’ accounts. EFT, or electronic funds transfer, is the deposit of part or all of employees’ pay into their bank accounts.

Legal abbreviations that affect payroll include FLSA for the Fair Labor Standards Act, which governs federal minimum wage and overtime practices; and the Employee Retirement Income Security Act (ERISA), which regulates employer benefits plans. Also, the Consumer Credit Protection Act, or CCPA, oversees federal wage garnishment laws, while the Family Medical Leave Act, or FMLA, regulates unpaid job-protected leave for eligible employees.

You’re required to withhold federal income tax, Social Security tax, Medicare tax and likely state income tax from your employees’ wages. Federal income tax migth be abbreviated as FIT, FT or FWT; Social Security tax as SS or OASDI; Medicare as MED; state income tax as SIT, SWT or the abbreviation for the state, such as GA for Georgia. Since both Social Security and Medicare taxes are collected under the Federal Insurance Contributions Act, they are often collectively called FICA taxes. In addition to FICA taxes, employers pay federal unemployment tax, which is abbreviated as FUTA; and state unemployment tax, abbreviated as SUTA.

Other mandatory payroll deductions might apply to your employees. For example, an ordinary wage garnishment might be abbreviated as GARN; child support as CH SUPP; Internal Revenue Service tax levy as IRS Levy; and state disability insurance as SDI.

Employers include employees’ wages and deductions for the pay period on their pay stubs. These abbreviations vary by employer and item. You would abbreviate payroll taxes and other mandatory deductions as normal. Regular wages may be abbreviated as REG, overtime as OT, salary as SAL, year-to-date as YTD, severance pay as SEV, bonus as BNS, vacation as VAC, holiday as HOL, personal time as PERS, retroactive pay as RETRO, and employee identification number as EE ID.

Some standard employee benefits abbreviations include 401(k) ER for 401(k) employer match; IRA for individual retirement account; DEP CARE or DCAP for dependent care assistance program; Sec-125 for cafeteria or Section 125 pretax plans such as DEN-125 for dental insurance and MED-125 for medical insurance. Long-term disability insurance may be abbreviated as LTD, short-term disability insurance as STD, and pretax parking expense as PRETXPRK.